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Wednesday, 13 July 22
MARKET INSIGHT - INTERMODAL
 Taking the previous market insight a step further, market sentiment remains bullish regarding the overall ROI of scrubbers, facing tailwinds from a surprisingly favorable Hi-5 spread. Under a blurred setting regarding the direction and efficiency of alternative fuels and the current geopolitical disruptions, owners tend to adopt a medium-term approach to the evaluation of their investment towards decarbonization, rather than a long-term which might be overturned.
Recent studies have shown that running on HSFO and on a scrubber produces way lower emissions than running on LSMGO, further confirming the viability of a scrubber investment. Currently, owners who will drydock their vessels soon are increasingly considering investing in pollution abatement technology, in return for the benefits from the expected savings in the bunkering costs.
Coming down to the decision-making, the choice of scrubber type is a key factor that shapes the fitting cost but will mostly affect future savings and compliance with changing regulations. While most vessels carry open-loop scrubbers, many vessels fitted now opt for hybrid types, which offer increased flexibility for operation in all areas, regardless of ECA’s constraining rules or seawater alkalinity. Technological investments have a special mechanism of assessment, therefore, payback period, level of risk, tax prospects and expected inflation should be considered. The main criteria regarding the justification of a scrubber investment should be the ROI (including CAPEX & OPEX), the space occupied, and the weight, with horizontal scrubbers weighting less and covering less space compared to vertical ones, thus, minimizing the impact on a vessel’s cargo-carrying capacity and its profitability. Due to the funding difference of the technology implementation, the terms of inflows (fuel savings) and outflows (CAPEX & OPEX) should be identified, while the determining factor will be the maximum payback period.
Currently, owners who have already invested in scrubbers are enjoying a high ROI, while benefiting from more than $500/t Hi-5 spreads. For instance, in Singapore it was assessed at an all-time high of $569.50/t on July 5th, creating, therefore, the perfect scenario for scrubber-equipped ships. In Fujairah, the set-up is pretty much similar with the spread fluctuating close to the $500/t range. While HSFO markets in Asia have been weakening on the back of sanctions on Urals crude in Europe and the US, VLSFO markets are seeing a tight supply as refineries have been utilizing sweeter crude to maximize gasoline production to meet the demand for the peak driving season in the US and due to the expanded regional turnaround and strong gasoline cracks.
At the moment, retrofitting times vary between 30 and 50 days, which is important to consider under the current market conditions. According to our data, retrofits now take place at a slower pace, while during 1H of 2022 only 3.7% of newbuilt vessels are scrubber fitted, compared to 13.9% during 1H of 2021. Since investments in technology are capital intensive, owners tend to keep a more conservative stance and ensure a balance in their fleets, until clarity is given on what will be the most cost-efficient and dominant compliant method.
By Chara Georgousi,
Research Analyst
Compiled by:
Intermodal Research & Valuations
Analysts:
Yiannis Parganas
Tamara Apostolou
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Wednesday, 26 January 22
MARKET INSIGHT - INTERMODAL
While it is logical that most of the S&P reports of the first weeks of the year are linked to very limited activity as reflected in the weekly ...
Wednesday, 26 January 22
INDONESIA: DME PROJECT IS ECONOMICALLY VIABLE AS STUDY DEMONSTRATES
The government is encouraging downstream coal processing or increase in coal added value, for example by turning coal into Dimethyl Ether (DME) to ...
Wednesday, 26 January 22
COMMODITY PRICES COULD SOAR IF THE RUSSIA-UKRAINE CRISIS ESCALATES - ING
It appears that a number of commodity markets are starting to at least price in some geopolitical risk around the growing tension between Russia an ...
Wednesday, 26 January 22
INDONESIA'S COAL BAN SENDS PRICES SOARING, OTHER EXPORTERS FAIL TO STEP UP - REUTERS
Indonesia’s short-lived ban on exporting coal has sent ructions through the seaborne market for the fuel in Asia, with the fallout likely to ...
Friday, 21 January 22
CHINA'S POWER TRADING TARIFFS TO RISE IN 2022 - FITCH RATINGS
Rising trading volume and higher-than-benchmark tariffs in the 2022 bilateral contracts signed between Chinese power generation companies (gencos) ...
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- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- The University of Queensland
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- Planning Commission, India
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Marubeni Corporation - India
- VISA Power Limited - India
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Agrawal Coal Company - India
- Toyota Tsusho Corporation, Japan
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
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